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Antonini 8, Sugaya 6, California 3, Moore 2, New Land Uses 1, Pdr 1, San Francisco 1, Mta 1, Us 1, Wu 1, Fong 1, The Tenant 1, Etc. 1,
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  SFGTV    [untitled]  

    July 22, 2012
    8:30 - 9:00pm PDT  

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the critical points. i think sitting together with president fong and former commissioner miguel, i am painfully aware about the difficulties of the small business. i am fortunate to see that formula retailers in the middle of abrogating formerly single stores in twto -- a small antiqe dealer is replaced -- 7-eleven is taken next door. between two of them, small businesses have disappeared.
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i think that the subtle difficulties should make us very aware of the ever-increasing uphill battle the small business is facing. i would like to ask to retain a very hot critical question if i may. in the discussion which i appreciate, on page 7, there is a comment about the grandfather provisions. the use of larger institutions, being able to avoid paying any of the impact fees because they are taking care of themselves. how could you please explain
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that using shovels are causing more transportation problems at the moment then there are solving and must be exempt from paying these fees? >> redirect in that? -- >> either of the two, -- commissioner, were you directing that question -- commissioner moore: to either of the two. >> the fee applies to land use, was someone provides shuttle service or not is not relevant to the payment of a fee. >> the one institution -- it does not a non-profit.
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>> the specific application is a project that are exempt. there are not subject to property tax. it is a for-profit institution. that is the distinguishing characteristic. commissioner moore: the greatest minds are working together and i have great admiration for everyone that participated. i am a strong supporter of public transportation, so i would say, let's just move this forward. there are many things i would like to ask a question about. this would have been the meeting where we got into a little bit more detail. how do we address the question
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the gentleman asked about a wholesale storage? all of these things upholding challenges are constrained in the current market at this particular time and raise questions of why we are doing this right now and why we are doing it so quickly. i would like to for the recommendation to anyone that can also be implementing it. given this is a very complex thing, i feel a little bit overwhelmed. commissioner antonini: i have a few questions, just on the feet in general. we're talking about these numbers, the $12.60 going to 1264. -- $12.06 going to $12.64. >> that is per square foot.
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commissioner antonini: it is assessed when they began operation? >> net new development. if your total is 10,000, but you grow by 1000, it is just on the 1000. the impact fees come due at issuance of the document. most projects are choosing to participate to allow projects got to pay their fees until issuance of the first significant -- certificate of occupancy. commissioner antonini: the other thing i have questions about hiis how this tidf compares with other jurisdictions or other cities that have these types of fees to offset transportation impact?
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>> i think a lot of other cities have transportation fees as part of the -- and many jurisdictions will take advantage of these. especially in our city where we rely so heavily on transit. however, in terms of keeping them out today, other cities have failed to do that. one of the things we have been doing is being able to update this appropriately. commissioner antonini: i will speak a little bit more to some of the updates, concerns about coming to the threshold of being around 3000 square feet and dropping it down to 800 does capture a lot of small businesses that might be a
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situation where there may choose not to develop, the fee might be significant enough that we might have a dampening effect on enlarging their facility or opening a new facility. i assume it would apply to both situations, particularly professional offices that can fall into there. a case can be made where you spread the fee evenly. everyone pays a rather than just the larger ones. i am a little concerned, i rather agree with small business that we have to look very carefully at the effect on a business that is open with only 1000 or 1500 square feet and if you do the math, you figure out how much that is going to be,
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the impact is probably more significant for that business than one that is larger and presumably only has factored in a lot of fees and costs into this operation, it easier for them to do it. i see both sides of its. in terms of casting a wider net, and have to include non profits. not saying that these are beneficial uses. the impact is probably just as great. we grandfather them for a while, it is probably appropriate and something that is new. that wasn't there before, but it is an expansion or a new use. there is some warning, but i think we're talking about january 2014 as a grandfather date that gives people plenty of time to get used to it.
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pdr and museum rates low word, is there reason why those uses have lower fee levels? maybe you addressed it -- >> it is based on the nexus analysis and the desire not to establish a fee rate that exceeds 68%, the museum's actually had a fairly significant difference on their trip generation than did other of those uses. they were able to parse that out to figure out what their rate should be. with pdr, the impact the rates
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in the fact, and hence the reduction. commissioner antonini: certain businesses would have a lower rate and i think it cuts both ways. we are addressing transportation needs of both in terms of paving streets, doing things the au areto-typ -- athat are auto-type cost. if more people are riding public transportation as a result of this, there is more cost on that end of it. it seems that in one sense, it cancels the other one out. >> with the proposal to include the credit for building reduced
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parking, it is not so much establishing a direct relationship has it is encouraging fulfillment of one of the policy priorities. or policy objectives. commissioner antonini: it is not really annexes situation because of the taxes could be more strain on the public transit system that often times is not adequate now to accommodate the people that are riding out. -- riding now. generally, it seems to be pretty well thought out. commissioner borden: yeah, i definitely want to support the concern around small business. i did not see the actual study, but i am interested to understand how many people or trips are attributed to the 800 -- i did not think the impact
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would be that great. >> it is my understanding that 800 per square feet is one net new impact. i'm not sure how it applies in transportation, but i can find that out and come back to you. when we're figuring out the calculators for each of the various types of services, this is where we see the new impact. >> it seems like a small threshold and it is somewhat surprising. the 3000 or less square footage, i imagine that it would be something that we want to look at. the pdr space, we spent a lot of time focusing on making sure we are protecting and supporting pdr's. we are able to keep the fee
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lower, that makes sense. if we are talking about attempting to be small businesses, and generally single owner who operated. to the extent that those businesses would also be impacted, her something of a policy question as we discussed space in general. the other question was related to charitable causes. you said that if the organization is exempt from property taxes, it does not matter if that our educational. or our educational institutions treated differently? >> i am going to read the language, because i find it a little bit dense.
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a charitable event is when the property owner is exempt from taxation under the california constitution, as implemented by the california revenue and taxation code. then, the sponsor is not required to pay. commissioner borden: it is based on exemption from california property-tax is? then i guess they are also exempt from san francisco property taxes. is that the case? so any organization falls into that category would be considered a charitable cause? >> right. commissioner borden: great. in terms of the policy credits, i think a lot of them make a lot of sense. i understand the concern of mta, but i share the issue about the burden on the smaller
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businesses, particularly because a lot of smaller businesses are neighborhood-related, which people walk to as opposed to take a lot of trips to. if there is not an easy way to separate out various different classes of small businesses in a downtown neighborhood or never would corridor -- i think there is a balance will need to figure out. considering that a lot of these are neighborhood businesses, to the extent that we should all support these, it is something we might look at. looking at the 100% for those businesses makes a lot of sense. talking about larger developments, there absorption capabilities are important. with grandfathering, the gentleman mentioned the project on sf-made.
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would they be considered part of the grandfather? or is it because their application is not filed by a september date? >> the with the ordinance is drafted, a project which filed a site permit prior to october 2012 are exempt from the square footage threshold change. the application of the key to new land uses, in this case, wholesale storage, would become effective with the adoption or enactment of the update. commissioner borden: whenever the board adopts it? >> whenever the board adopts it. in the case of the situation the gentleman was describing, in all likelihood, his project would be subject to the fee, unless an effort were made to provide a grandfather provision. commissioner borden: i recognize
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that when people follow applications, they are told that fees can change at any time. i recognize that. but particularly with the new categories of uses, it is one thing when a category of use was subject to the fee that is increased. it is another thing when they were never subject to the feet, and now it is a big thing. to the extent that we can look at how there might be appropriate -- i do not know what the date is. it seems to me that projects that have been in process to this point that were always subject to the free -- we should figure out how we can treat them so these projects are not ruined. maybe the answer is the policy credit, in some cases, related to vacant spaces. i am not sure from that space, if that is the case.
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>> i think if the commission's desire is to grandfather these types of uses that it would be cleaner and more explicit to simply grandfather them, and not try to cover that to the policy credits program. commissioner borden: i would be eager to hear what other commissioners think. commissioner sugaya: i would like a little -- the transportation sustainability program has never been presented to us, as far as my memory. was it? but these changes that we are not talking about will be adopted by the board on this time line later this year. is that correct? >> one ordinance updates the impacting transit development
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fees. that is what we are reviewing today. the other, which establishes the transportation sustainability program, is subject to eir and will be another year. commissioner sugaya: so, we are going through this exercise for about 18 months of changes? >> if everything goes according to plan, yes. commissioner sugaya: i have a question for the small business commission staff. as it was presented, you have two alternatives. they are mutually exclusive. >> the commission provided the alternatives to allow some flexibility, recognizing that the policy program would achieve a similar or increased benefit. i think, looking at the planning
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staff recommendation, there are a combination of the two which accomplish the goals of our commission laid out, with the caveat that the policy credit 90% limit is not fully consistent with our recommendation. commissioner sugaya: i do not know how commissioners would feel, but if we were to recommend this on incorporating your suggestion, would it be one or the other? that is what i am trying to understand. >> considering the direction they are moving towards with policy credits, i think if you move in the direction of 100% that it would be fully in line with our recommendation. vice president wu: i am going to make a couple of comments and then go to commissioner antonini. on the nonprofit question, its staff could give examples --
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what kind of nonprofits would these be? would it be office space? program space? i am trying to get a sense of what kind of entity or reason you would be paying the fee for. >> it would be any net new development associated with the non-profit or institutional use, ranging from very small scale to very large scale. an example might be an independent private secondary school, a high-school that wanted to build a gym. another example could be establishing a new site -- you would think i would have some examples in mind. vice president wu: i have a similar concern to small businesses. if you have a smaller nonprofit
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trying to maybe build an office, this is some sort of burden. is there a hardship waiver overall that the department offers, which may not apply for nonprofits that can show financial hardship? >> there is no hardship provision with impact fees. the department come on its own, does have an impact provision. typically, the way those are addressed this through establishing a waiver or credit program. in the case you are describing, where a nonprofit was trying to build office space, it could actually be eligible for the policy credit program, in that case. so long as it was under 5000 gross square feet, it would not be subject to the fee. in particular, if the desire is to recommend a 100% fee waiver. vice president wu: i would support the policy credits, and it sounds like the commission is
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moving in that direction, including the 5000 square foot threshold for small businesses. for small businesses in particular, i think the 100% credit does make sense, although i recognize that every new development has some imposition on the transit system. i think the argument that it is so hard, the figure of around $6,000 in fees for a new small- business -- i also would support grandfathering -- extending the grandfathering for -- i think the category was nonprofit institution, but then possibly for the new categories that would be brought in under the feet. i was not on the commission with the t s p hearing. i share some concern around the policy credit for developers who are not building parking. i understand the desire to want
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to incentivize less parking. it follows the transit first policy. i also think that developers are already saving money by not building parking. there is somewhat of an incentive there, maybe. i may not understand every developer's business decisions. but i think that does put more of an imposition on the transit system itself. i just want to flag that. i am not intending to ask for a motion. commissioner? commissioner antonini: i have a question on this. if we deal with the situation where a business was in operation with 2000 square feet, and then we dropped the floor down to 800 square feet, it would have to be a business that is starting new, not one that is in existence. just looking at this
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hypothetically, and i guess the question of whether it would be a landlord or tenant -- one would assume the builder of the space would have to pay the fee. quite probably, it would be passed on to the tenant, in terms of rent, to be able to justify the cost. i am just thinking, in terms of a small operation of 2000 square feet, which is typical for a professional office -- that is like $26,000. it is a big piece of change, if i am doing the math right. it is almost $13 a square foot. that is a pretty good piece of change. you are building something new, and it is part of the cost of whatever you are building, and you have to factor that into your rent and everything else. but i think a small-business group makes a good case. i would support the
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recommendations, if we have a motion to keep the current 3000 square foot exemption in place. also, i have the same concerns that commissioner wu brought up about giving extra credits to those who do not provide parking, because the impact is still there, as mentioned. it is just in a different form. i would have to see how much credit there was. but i probably agree with her position. commissioner sugaya: i apologize. i do not remember anything about the tsp program. that said, if this is an interim provision until such time as the t s p is implemented, then how much of what we're talking about today carries over in another program? if we are recommending moving
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toward 800 square feet, to be retained as a recommendation, with that carry over? or does that have a different set of square footage is? >> the ordinance -- they were sort of parallel ordinances, introduced at the same time. there is an assumption of a threshold. there is a policy credits program, which covers the two residential uses, the small business, and parking. at this point, the tsp does not establish a 100% fee waiver. it is left open for the policy makers. it does apply to non-profit and institutional uses, automotive services, etc. in some ways, bringing these
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provisions in today lays the groundwork for what is proposed to happen in a year and a half. from that perspective, that is part of what has generated staff recommendations to provide some grandfathering, so there is consistency between the programs, but time to accommodate those changes. commissioner sugaya: substantially, the two are similar? >> with a major exemption being that this does not apply to residential use, and there is a change to how we conduct ceqa analysis. commissioner borden: so you are saying -- the policy credits -- they are part of the tsp? it is the 100% level or the 90% level? >> that is left as an open question, to be determined as we go through the environmental and policy process. commissioner borden: defined the to be a conflict? it sounds like, if we were to
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make a motion to adopt at the 100% level -- would it be inconsistent to grandfather the new uses to the point at which the tsp is passed? it would give people who are currently in the pipeline enough time to hopefully get their projects to the site permit. at the same time, there would be on notice for the net new projects. i wanted to make sure that would be consistent. >> that is what generated our recommendation to grandfather to january 2013, when we expected the tsp to be through its process. i think this would give sufficient notice. it is very consistent. commissioner borden: i motion that we approved, with the